where will you transfer capital profit?

if a machinery had purchased for 10d sold for 15,00,000 and 2year depreciation 10% p.a by slm method. What amount will you transfer as capital profit?

  • Shweta Sharma
  • Shweta Sharma
  • |
  • 12 Sep
  • |
  • 319 Views
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  • 18 Answers

text limit upto 4000

  • 1

    Purchase Value of Machinery Rs.1000000/-
    Calculation:
    Purchase Value :  Rs.10,00,000/-
    SLM @ 10%      :  Rs.1,00,000/- ( for 1 year)
    Balance             :  Rs. 9,00,000/-               
    SLM @ 10%      :  Rs.1,00,000/- ( for 2 year)
    Balance             :  Rs. 8,00,000/-   ( Value @ end of 2nd year)     A
    Sale Value        :  Rs.15,00,000/-                                               B
    Profit on Sale of Machinery: (B-A) Rs. Rs.7,00,000/-  
    The balance amount Rs.7,00,000/- shall be added to Capital Profit stating, "Profit on sale of machinery"

    • Voted By:
    • T.Bala

  • 0

    Amount need to transfer as Capital Profit is (700000 Minus Tax on Profit). e.g. if ,Tax rate is 25%, then Capital Profit will be 525,000 (i.e. 700,000 minus 175,000)..


  • 0

    Rs. 700000 must be transferred to Balance sheet or added to net profit on the liabilities side.


  • 0

    700000/-


  • 0

    If you had purchased a machinery rs 1000000 sold for rs 1500000 after charging 2 years depreciation @ 10% pa then wdv of the assessment after two years will be rs 810000 as rs190000 is written off as depreciation if we sold the asset at rs 1500000 then capital profit will be rs (1500000 - 810000) =690000.....hope I could help youu..my whatsapp num is 9831792012 if there any other queries you can ask freely....


  • 0

    Rs. 7lakhs


  • 0

    200000 shall be transfer as revenue profit and 5,00,000 shall be transfer to capital reserve as we transfer capital profits to capital reserve..


  • 0

    5lakhs Purchase price = 10 lakhs Total dep= 2 lakhs Sale price = 15 lakh Brought down value of mach. = 8 lakh Total profit= 15-8=7 lakh Already rec loss in p&l = 2 lakh i.e, revenue profit Balance profit = 7-2=5 lakh will be CAPITAL PROFIT


  • 0

    For accounting purpose it transfer to Profit & Loss account, for Income tax purpose if it only one block of assets, then its a STCG. if more than block of assets, then reduced from block of assets. Amount is Rs. 6,90,000 (1st year dep. Rs.1lakhs & 2nd year Rs.90K, reduced from 10L. (15-810000)


  • 0

    700000
     


  • 0

    700000
     


  • 0

    700000
     


  • 0

    15,00,000 - 8,00,000 =7,00,000


  • 0

    700000


  • 0

    700000 will transfer to capital account


  • 0

    8208


  • 0

    For Example:
    1. Purchase Value of Machinery Rs.1000000/-
    Calculation:
    Purchase Value :  Rs.10,00,000/-
    SLM @ 10%      :  Rs.1,00,000/- ( for 1 year)
    Balance             :  Rs. 9,00,000/-               
    SLM @ 10%      :  Rs.1,00,000/- ( for 2 year)
    Balance             :  Rs. 8,00,000/-   ( Value @ end of 2nd year)     A
    Sale Value        :  Rs.15,00,000/-                                               B
    Profit on Sale of Machinery: (B-A) Rs. Rs.7,00,000/- 
    The balance amount Rs.7,00,000/- shall be added to Capital Profit stating, "Profit on sale of machinery"


  • -1

    There are different answers of one question I got confuse I tell U the right answer . .. Capital profit and losses are transferred to Profit and loss account . ... And it is the correct answer .. For this depreciation question .


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